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 Billionaire John Malone's Liberty, which bought British cable
operator Virgin Media as part of a European expansion last year,
said it did not intend to make an offer for the rest of the
broadcaster, but ITV shares still rose 9 percent.
The sale, at a price of 481 million pounds ($824 million), may also
indicate that BSkyB is looking to raise cash to push ahead with its
own expansion plans after it opened talks this year to buy Rupert
Murdoch's Sky Italia and Sky Deutschland.
The purchase is just the latest in a string of deals in the global
media sector to buy content and follows ITV's drive to develop its
production arm and generate revenue beyond its traditional, and
volatile, advertising source.
"It is hard to see how this will not be looked at as anything other
than Liberty planting a flag in the ground for a potential
acquisition at some point," Liberum analyst Ian Whittaker said.
"ITV is now likely to be seen as a potential M&A story, especially
given recent news flow in the media sector."
Just this year, Liberty teamed up with Discovery Communications to
buy TV producer All3Media, Discovery took a controlling interest in
European sports broadcaster Eurosport and Murdoch's 21st Century Fox
has been seeking to buy Time Warner.
Cable operators have traditionally focused on providing broadband
and television to households, meaning they were more likely to be
aggregators and re-sellers of programing, but Liberty has owned
content companies in the past.
Dubbed everything from the Cable Guy to Cable Cowboy, Malone made
his fortune through a series of deals that transformed and
ultimately consolidated the U.S. cable industry into one dominated
by a few big players. Liberty Global is now also present in 12
European companies.
It called ITV officials on Wednesday evening to make them aware of
the stake sale and to say it did not intend on launching a full bid.
ITV'S GOT TALENT
ITV, which began broadcasting in Britain in 1955 as Channel 3, is
known for airing "Britain's Got Talent" and "Downton Abbey".
The company, renowned for producing some of Britain's most popular
dramas in the 1980s and 1990s such as "Prime Suspect", was hammered
during the financial crisis as advertisers and viewers deserted its
TV channels.
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It has since been rebuilt under Chief Executive Adam Crozier by
improving the quality of its programing and selling it around the
world, which helped non-advertising sources contribute 44 percent of
its revenue in 2013.
With shares up 9 percent at 201 pence at 1005 GMT, ITV had a market
valuation of 8.1 billion pounds.
The stake sale brings an end to one of the most controversial
corporate moves in the British media sector - the decision by James
Murdoch, then BSkyB boss, to buy 17.9 percent of the then struggling
ITV to block rival NTL from creating a larger, more powerful
competitor.
The move in 2006 kicked off a long-running regulatory investigation,
which eventually forced BSkyB to reduce the stake to 7.5 percent.
BSkyB bought the shares in 2006 for 135 pence each, sold more than
10 percent at 48.5 pence, a deep loss, and sold the remainder this
week at 185 pence.
NTL went on to become Virgin Media, which was then bought by
Liberty.
"This is an opportunistic and attractive investment for us in our
largest cable market," Mike Fries, Liberty Global's chief executive
said in a statement.
($1 = 0.5840 British Pounds)
(editing by Jason Neely and Jane Baird)
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